The United States Department of Justice has dropped a campaign finance charge filed against cryptocurrency exchange FTX founder Sam Bankman-Fried.
Bankman-Fried was a major political donor during the 2022 midterm election, allegedly using about $40 million from his company to illegally donate to more than 300 political campaigns, including the Democratic National Committee. The department reportedly opted to drop the campaign finance charge in order to move forward with extraditing Bankman-Fried from The Bahamas.
According to a document filed in the Southern District of New York, U.S. Attorney Damian Williams told Judge Lewis Kaplan that the “Government has been informed that The Bahamas notified the United States earlier today that The Bahamas did not intend to extradite the defendant on the campaign contributions count.”
“Accordingly, in keeping with its treaty obligations to The Bahamas, the Government does not intend to proceed to trial on the campaign contributions count,” wrote Williams.
Bankman-Fried was also indicted on seven other charges, including wire fraud, securities fraud and money laundering, on Dec. 13, 2022. He is accused of conspiracy to defraud the Federal Election Commission.
“The charges in the indictment arise from an alleged wide-ranging scheme by Bankman-Fried to misappropriate billions of dollars of customer funds deposited with FTX, the international cryptocurrency exchange founded by Bankman-Fried, and mislead investors and lenders to FTX and to Alameda Research, the cryptocurrency hedge fund also founded by Bankman-Fried,” stated the DOJ in a press release.
Attorney General Merrick Garland vowed to “aggressively investigate and prosecute alleged criminal wrongdoing in the financial system and violations of federal elections laws.”
Bankman-Fried was arrested in The Bahamas on Dec. 12 and denied bail on Dec. 14. He was later released on a $250 million bail bond that was co-signed by multiple people including his parents, who are both Stanford Law professors.
According to Forbes:
This is not the first instance where the terms of Bankman-Fried’s extradition treaty have impacted the charges brought against him. Last month, the DOJ informed Kaplan it was prepared to try Bankman-Fried on eight counts brought against the FTX founder in its original indictment in December last year—temporarily forgoing the five additional charges that were filed earlier this year. Under the terms of Bankman-Fried’s extradition, any additional charges brought against him would need to be approved by the Bahamian government. A court in the Bahamas has blocked the country’s government from approving the five additional charges—which include bank fraud, operating an unlicensed money-transmitting business, and bribery—until his attorneys have a chance to fight them.
Bankman-Fried and other company executives have been sued by FTX Trading, which hopes to recoup over $1 billion that was “misappropriated before FTX went bankrupt,” per Reuters. The plaintiffs include Caroline Ellison, the former CEO of Bankman-Fried’s Alameda Research hedge fund, Zixiao “Gary” Wang, the former chief technology officer for FTX, and Nishad Singh, the former FTX engineering director. Ellison, Wand, and Singh have all pleaded guilty to charges filed against them and are cooperating with the DOJ.
